DEFENSIVE SELF-SUFFICIENCY

The effective economic reforms of the last two decades enabled Azerbaijan to achieve almost complete energy, infrastructure and, most importantly, financial independence. The experience of the past 10-15 years shows that the strategy of accumulating and reinvesting oil revenues in the localization of modern industrial areas in the country has fully justified itself.

It is noteworthy that in recent years, the vector of the state's investment activity has shifted towards the development of the defence industry. The government outlined the issue of manufacturing defence products inside the country as a super-important task for the next decade. This is evidenced by the state budget adopted for 2012: about 14.8 per cent of spending will be used for military needs, and about half of the reserved three billion manats will be spent on the development of the defence industry.

Six years of progressive development

On 17 December 2011, the Azerbaijani Ministry of Defence Industry marked its sixth anniversary and, as expected, announced the results of the past period and outlined the main trends for the future. Indeed, a lot has been done over the years: under the state programme for the development of the military industry until 2016, the Ministry of Defence Indistry, with the support of the world's leading arms companies, reconstructed and retooled about two dozens of military plants established during the Soviet era. They were reorganized for the modern needs of the Azerbaijani armed forces, increasing the volume of production by several dozen times.

For example, from December 2007 to 2009, about 10 modernized enterprises were put into operation. Among them are the enterprises Ufuq and NPO Iqlim, the factories Alov, Cihaz, Dalga, Peyk, a scientific-research institute with a pilot factory and a number of other objects that form part of the Sarq association. Over the past two years, the Ministry of Defence Industry has started to modernize a dozen of companies involved in defence production. In the coming year, in the process of expanding and modernizing the production base, the Ministry of Defence Industry plans to increase the number of defence plants to 28.

Four new enterprises opened in March and September of this year (three plants in Baku and one in Xacmaz), and the rest will be commissioned shortly. As a result, by the end of this year, the ministry's industrial system was expanded to 42 production sites.

According to Minister Yavar Camalov, by the end of 2011, the production of defence products increased by 23 times compared with 2007 and by 2.5 times - compared with the previous year. Over the past six years, international cooperation has been established with 60 foreign firms and companies in 20 countries around the world. As a result, the reorganized military-industrial complex now supplies the army with about 658 types of weapons and munitions, and the production of 228 of them was launched in the current year.

The high pace of the development of the domestic defence industry has been repeatedly reaffirmed by foreign experts, and during four international exhibitions, military specialists displayed an interest in arms and munitions produced in Azerbaijan. The International Gulf Defence & Aerospace Exhibition, which opened in Kuwait on 12 December, was no exception. This representative forum was attended by a delegation of the Ministry of Defence Industry, which presented an interesting exposition of the 97 defence products. The samples of small, light and artillery weapons and munitions and other products that were demonstrated there caused a considerable interest among specialists from the USA, UK, France, Germany, Canada and other countries. Moreover, during the ministry delegation's meetings with representatives of the Ministry of Defence and security agencies of Kuwait and other Arab states, an agreement was reached on the participation of our Defence Industry products in military tenders held in Persian Gulf states.

Participation in international exhibitions played a significant role in establishing the export of arms and munitions: for example, in 2010 Azerbaijan sold military equipment worth $ 13 million to third countries, and in 2011, supplies increased to $ 18 million. As the nomenclature of arms expands, the export potential of our country will significantly increase, and therefore, the Ministry of Defence Industry plans to hold the first national exhibition of the defence industry directly in Baku in 2014.

From drones to guided missiles

Thus, using the potential of about 25 defence plants, the Ministry of Defence Industry is preparing to start producing new types of munitions for tanks and artillery guns and 40-millimetre revolver-type grenade launchers. Recently, the Ministry of Defence Industry started serial production of licensed analogues of the Russian AK-74M: the Azerbaijani version of the assault rifle, called "Xazri", is designed for the installation of night vision devices, daytime optics, laser sights, a warning system or an underslung grenade launcher. This year, the Ministry of Defence will get up to five thousand of these assault rifles.

This year, the Azerbaijani company Sarq started producing 120-mm calibre HY1-12 mortars, with an increased range and rate of fire, together with the Turkish company MKEK. This year, the Turkish company Roketsan and Azerbaijan's Iqlim also started making 107 and 122-mm calibre multibarrel missile launchers that strike targets at ranges of 11 to 40 kilometres.

As the most important goal for the next couple of years, the Ministry of Defence Industry plans to transfer technologies for anti-tank guided missiles (ATGMs) with laser guidance and helicopter missiles with infrared guidance heads. In particular, Pakistan's largest defence holding - GIDS (Global Industrial & Defence Solutions) - plans to launch joint production of RPB-1 guided air missiles with our country. The Ministry of Defence Industry and the Defence Ministry of Pakistan are discussing the possibility of the licensed production of other aviation, land and sea rocket systems. The Ministry of Defence Industry is also completing negotiations on the joint production of ATGM systems with the Ukrainian corporation Luch. The matter is about buying launchers such as Skif and Barrier and the subsequent production of guided missiles for them in our country.

In the first quarter of 2012, the Radioqurasdirma factory will begin the production of approximately 12 thousand flak jackets and 15 thousand helmets, using composite materials with a licence from the Jordanian company NP Aerospace Jordan. In addition, according to Minister Yavar Camalov, in the near future, Azerbaijan plans to build several chemical plants to produce various types of explosives. It is expected that the first plant for the production of artillery powder, barite nitrate, TNT and RDX will be commissioned as early as next year.

In parallel, production is also increasing at previously neglected sites. For example, work is under way at the Cihazqayirma plant together with the South African company EWT to modernize the guidance systems of T-72 tanks and BTR-70 and BRDM-2M armoured vehicles, equip them with modern electronics, day and night vision devices, etc. The Cihaz factory has been cooperating with South Africa's Paramount Group for two years to build Matador and Marauder armoured vehicles equipped with an improved system of protection against anti-tank mines. This year alone, the Azerbaijani army will receive 60 new armoured vehicles. Perhaps, with the support of Paramount Group, our country will start producing the modern infantry fighting vehicle Mbombe in the near future.

However, the most significant breakthrough in the country's defence industry occurred in a qualitatively new area for us - the aviation industry. In March 2011, the new plant NAM - Azad Systems Co was opened. It is part of the Sarq company and makes remote-controlled unmanned aerial vehicles (UAVs). It is expected that by the end of 2012, up to 60 Orbiter-2M and Aerostar UAVs, developed by the Israeli company Aeronautics Defence Systems, as well as ground control systems for them will be made.

Also called "drones" (the name is borrowed from the epic "Star Wars"), modern UAVs are the most affordable and effective means of reconnaissance and are used for detecting and destroying enemy radar stations and armour. Their shell is made of carbon fibre, which makes the "drones" virtually invisible to radar installations. These devices can be launched from any unequipped location, are able to perform many hours of reconnaissance flights at very low altitudes, transmit all surveyed information from a distance and land almost anywhere. The advantages of UAVs are comparatively cheap production, flexibility of equipment and multifunctionality.

MIC enters the civilian sector

It is noteworthy that in parallel with the expansion of the range of defence products in recent years, the Ministry of Defence Industry has significantly increased the production of new kinds of civilian products. For example, in 2011, the manufacture of civilian products almost doubled compared with 2007, and their range reached 358 products. Among other things, defence companies have started to produce flow head equipment for the oil and gas industry, gas receiving systems at terminals, automated information and control systems, regulating and measuring units, various perforators, as well as tracks for tractors, mobile food thermoses, smart meters, digital traffic lights, etc. The PEYK plant has launched the production of DVB-T-tuners for receiving digital TV signals and licensed Taiwanese flash drives. And in the relatively distant future, factories of the Ministry of Defence Industry have to master the production of more complex radio electronic equipment - for example, the production of VSAT satellite communications systems, electronic cards, equipment for monitoring and tracking networks, space warning systems, etc. In particular, in light of the recently approved state programme for the development of the space industry in the Azerbaijan Republic and the creation of a national aerospace agency, there are plans to develop space equipment and technology in the country.

Thus, the Ministry of Defence Industry, established a few years ago, produces modern weapons and meets more than four-fifths of the demand of the Azerbaijani army for ammunition. As an essential element of national security, the military-industrial complex is also the chief conductor of innovative and high-tech industrial production in the civilian sectors of the economy.